Paying ATTENTION...
to people and their money

Denise Swan, CEO
GEMC Federal Credit Union

Georgians Finally Put Away Old Keys,
Buy More New Vehicles

New poll reveals trend in car-buying habits
and fears about retirement

ATLANTA (June 13, 2012) – Georgians continue driving their vehicles longer1 hoping to avoid spending their hard-earned cash, but when it’s time to replace their aging automobiles, they are buying new instead of used.

That's according to the latest "Paying Attention" report released today by Georgia Credit Union Affiliates (GCUA). The report, published quarterly, also signals that while consumers are squirreling away money, they remain worried about their financial future and wonder whether they will ever be able to retire.

During the first quarter of 2012, new car loans grew 3.89 percent – a substantial increase from the 0.52 percent growth during the first quarter of 2011; used vehicle loans increased 0.19 percent during the first quarter. And, in a sign that Georgians remain pennywise, savings account balances at the state’s credit unions have swelled 5.5 percent so far this year while credit card balances have dropped 4.66 percent.

"Georgia consumers have shifted spending and saving habits over the last several years to offset the struggles they experience during economic doldrums," said Mike Mercer, GCUA's president and CEO. "As we see in this latest report, Georgians are driving their cars and trucks until the last crank. But when it comes time to replace their mode of transportation, they're finding it makes more sense to buy new instead of used."

As it turns out, consumers can finance a new car with a six-year loan with a rate that beats a similar loan for a used vehicle.2

"Consumers aren't afraid to spend more when they know it's a good investment," Mercer said. "This change in spending and growth in new car purchases is a positive sign, especially when Georgians' savings balances are growing simultaneously."

The uptick in savings balances can also be attributed to the fact that many Georgians are worried about their retirement.

GCUA's "Paying Attention" report also revealed that nearly one in five respondents (18.1 percent) said they don't know how they'll ever be able to retire. At the same time, 51.6 percent said they are not comfortable with the current amount they have saved for retirement.

Of those who were not satisfied with their current retirement savings, 35.5 percent report that they are "saving more" specifically to bolster retirement savings.

"There is an inevitable ripple effect from these warranted retirement concerns," Mercer said. "No matter the type of lifestyle adjustments, it is clear that Georgians are committed, for the long haul, to saving more and preserving their hopes for retirement."

Other insights gathered from the report revealed:

  • Used vehicle loans are up 7.08 percent in the last 12 months
  • First mortgages rose 10.12 percent in the past year
  • Bankruptcy filings fell 2.34 percent during the first three months of the year (compared to the first three months of 2011)
  • Total loans increased 0.61 percent in the first three months of 2012

The "Paying Attention" report combines savings and lending data from 38 credit unions from across the state – representing 91 percent of credit union assets and 85 percent of members in Georgia – with poll responses from more than 2,400 credit union members.

1The average length of ownership of new vehicles nationwide has increased to a record 71.4 months (nearly six years), according to Polk, a leading global market intelligence firm.
2According to the latest GCUA Member Benefits Index, the average interest rate for a 60-month new car loan was 3.85 percent while a 48-month used car loan was 4.01 percent.

Click here to view previous "Paying Attention" reports. More information about Georgia credit unions is available at www.georgiacreditunions.org or on facebook.com/creditYOUnion.

About Georgia Credit Union Affiliates
Georgia Credit Union Affiliates (GCUA) provides services and support that help credit unions meet the financial services needs of the state’s more than 1.8 million credit union members. GCUA offers advocacy, educational, operational and marketing support for Georgia’s 149 credit unions, with combined total assets of more than $17 billion. More information can be found at www.georgiacreditunions.org.

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Trends at Georgia Credit Unions
Consumer Credit
 
Consumer Savings $ Balances
Growth Rates
Growth Rates
 
YTD
12 Months
   
YTD
12 Months
Credit Card -4.66% 1.46%   Regular Savings 8.69% 11.26%
Other Unsecured -4.90% -2.08% Money Market Accounts 4.39% 7.56%
New Vehicle 3.89% 6.89% Certificates of Deposit -1.56% -2.49%
Used Vehicle 0.19% 7.08% IRA/KEOGH Accts 1.13% 3.42%
1st Mortgage 2.07% 10.12%
Transaction Accounts $ Balances
Other Real Estate -3.04% -6.66% Checking Accounts 14.00% 18.95%
Business 2.10% 8.38%      
Total Loans 0.61% 5.93%   Total Savings 5.50% 7.48%
Number of Bankruptcy Filings:        
YTD no. of Filings   1,625        
% Change from YTD March 2011   -2.34%        
* First 3 months of 2012 compared to first 3 months of 2011   YTD: 1/1/12 - 3/31/12
12 Mos: 3/11 - 3/12
Georgia Credit Union Affiliates